Hut 8 Reports Operating and Financial Results for the Six Months Ended December 31, 2023
- Strong financial results for the six months ended December 31, 2023, with revenue of $60.6 million, net income of $6.2 million, and Adjusted EBITDA of $62.3 million.
- 9,195 self-mined Bitcoin on the balance sheet, representing a market value of approximately $388.1 million.
- Merger with US Bitcoin Corp. driving efficiencies and strengthening the company's position in the market.
- Focus on topline revenue growth, cost reduction, and diversification of the business for fiscal year '24.
- Operating portfolio totaling 839 MW across 11 sites in North America, with a self-mining hashrate of approximately 6.3 exahash per second.
- Cost to mine a Bitcoin for owned facilities at $16,353, showing operational efficiency and cost control measures.
- Significant improvement in Adjusted EBITDA by 386% to $62.3 million compared to the prior year period.
- Positive impact on net income due to the early adoption of ASU 2023-08, leading to a $32.6 million gain on the revaluation of digital asset holdings.
- Continued focus on building a lasting, generational business committed to maximizing shareholder value.
- Market value of self-mined Bitcoin increasing to approximately $557.3 million as of February 29, 2024.
- None.
Insights
The recent financial results from Hut 8 Corp. signify a substantial recovery in its operations, particularly when considering the leap from a net loss of $81.3 million to a net income of $6.2 million within a six-month period. This turnaround can be attributed to the strategic merger with US Bitcoin Corp, which appears to have provided Hut 8 with enhanced operational scale and financial stability. The company's focus on efficiency and cost reduction has likely contributed to the impressive 386% increase in Adjusted EBITDA.
From an investment perspective, the company's strong balance sheet and controlled debt levels are promising indicators for future growth, especially as they head into the Bitcoin halving event. Their strategy to limit shareholder dilution by reducing the need for external capital is noteworthy, as it could lead to higher earnings per share and potentially increase stock value in the long run. However, investors should be mindful of the volatile nature of Bitcoin prices, which can significantly impact the company's market value and profitability.
Hut 8's strategic positioning within the digital asset mining industry is evident through its substantial self-mining hashrate and the large-scale energy infrastructure it operates. The increase in revenue is a positive signal that the company is capturing a larger market share and effectively monetizing its services. Their focus on diversifying revenue streams, as seen in the managed services and high-performance computing sectors, could mitigate risks associated with the fluctuating digital asset market.
Furthermore, the cost to mine a Bitcoin has remained relatively stable despite the increase in hosting costs, indicating effective cost management strategies. The company's expansion plans, with over 1,100 megawatts of energy development capacity under exclusivity, demonstrate an aggressive growth strategy that could be attractive to investors looking for companies with a clear roadmap for scaling operations.
The operational highlights of Hut 8 Corp. reflect a deep integration with the cryptocurrency mining industry. The self-mined Bitcoin balance and the valuation increase from December 2023 to February 2024 underscore the company's ability to leverage market conditions effectively. With the upcoming Bitcoin halving event, Hut 8's approach to scaling its mining capacity could position it to benefit from potential increases in Bitcoin value due to reduced supply.
However, it's important for stakeholders to understand the inherent risks of cryptocurrency volatility. The company's decision to adopt the new FASB fair value accounting rules, resulting in a substantial gain on the revaluation of its digital asset holdings, also underscores the impact of accounting practices on financial reporting in the crypto space. Stakeholders should consider both the operational strengths and the market risks when evaluating Hut 8's prospects.
Revenue of
Net Income of
9,195 self-mined Bitcoin on balance sheet as of December 31, 2023
MIAMI, March 28, 2024 (GLOBE NEWSWIRE) -- Hut 8 Corp. (Nasdaq | TSX: HUT) (“Hut 8” or the “Company”), a leading, vertically integrated operator of large-scale energy infrastructure and one of North America’s largest Bitcoin miners, today announced its financial results for the six months ended December 31, 2023.
“Our results this period demonstrate the strength and potential of the new Hut 8. Our thesis for the merger was to combine the operating scale and discipline of US Bitcoin Corp with the strong balance sheet, access to capital markets, and liquidity of Hut 8 Mining Corp. Since closing, we have focused tirelessly on driving efficiencies through a comprehensive restructuring program. While there is still work to do, I am proud of the progress we have made,” said Asher Genoot, CEO of Hut 8. “Our goal is to continue building a profitable, diversified business during fiscal year ’24. With this in mind, we will continue to focus on driving topline revenue growth and cost reduction across the business.
“Looking ahead, we are focused on two pillars of growth: strengthening and growing our self-mining business, and continuing to diversify our broader business. We currently have more than 1,100 megawatts of energy development capacity under exclusivity, which represents nearly 63 exahash of capacity if filled with current generation miners. As we head into the halving, we maintain a strong balance sheet with what we believe to be healthy and manageable debt. This will allow us to invest in growth while reducing the need for external capital and limiting shareholder dilution.
“We have already proven that we can operate at scale, with approximately 27 exahash under management across our self-mining, hosting, and managed services business lines as of the end of February. We believe our ability to build sites quickly and cost-efficiently without sacrificing quality is unmatched, and our team has a single-minded focus on building a best-in-class operating business. With our capabilities, resources, and team, I am more confident than ever that we will build a lasting, generational business committed to maximizing shareholder value.”
Six Months Ended December 31, 2023 Financial and Operational Highlights
U.S. Data Mining Group, Inc. dba US Bitcoin Corp (“USBTC”) and Hut 8 Mining Corp. completed an all-stock merger of equals (the “Business Combination”) on November 30, 2023. USBTC was deemed the accounting acquirer in the transaction, so the Company’s results of operations reflect only USBTC’s performance up until the completion of the Business Combination on November 30, 2023. The Company’s results of operations for the combined company start on December 1, 2023.
There was also a change of year-end for the accounting acquirer, USBTC, from June 30 to December 31. As a result, the Company is filing transition period financial statements as a bridge between USBTC’s last year-end, which was June 30, 2023, and Hut 8 Corp.’s new year-end, which is December 31, 2023. The outcome of this is a six-month set of financials, including audited financials for the six months ended December 31, 2023 and unaudited financials for the six months ended Dec 31, 2022.
- Operating portfolio totaled 839 megawatts (“MW”) across 11 sites in North America comprising six digital asset mining sites and five cloud and colocation data centers as of December 31, 2023.
- Self-mining hashrate totaled approximately 6.3 exahash per second (EH/s) as of December 31, 2023, including the Company’s net share of the King Mountain joint venture (“King Mountain JV”).
- Revenue increased by
$14.6 million to$60.6 million from$46.0 million in the six months ended December 31, 2022. - Net income improved to
$6.2 million compared to a net loss of$81.3 million in the six months ended December 31, 2022. - Adjusted EBITDA increased by
$49.5 million to$62.3 million from$12.8 million in the six months ended December 31, 2022. - During the six months ended December 31, 2023, 1,244 Bitcoin were mined. As of December 31, 2023, total self-mined Bitcoin balance of 9,195, which represented a market value of approximately
$388.1 million . As of February 29, 2024, total self-mined Bitcoin balance of 9,110 Bitcoin, which represented a market value of approximately$557.3 million . - Cost to mine a Bitcoin for owned facilities, including the Company’s net share of the King Mountain JV, was
$16,353 , versus$16,447 for the six months ended December 31, 2022. Cost to mine including hosted miners was$18,815 , versus$16,305 in the six months ended December 31, 2022.
Key Performance Indicators
| Period from | |||||||||||||||
| December 4, 2020 | |||||||||||||||
| Six Months Ended | Twelve Months Ended | (Inception) through | |||||||||||||
| December 31, | June 30, | June 30, | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2021 | |||||||||||
| Cost to mine a Bitcoin (excluding hosted facilities)(1) | $ | 16,353 | $ | 16,447 | $ | 14,672 | $ | 13,161 | $ | 12,075 | |||||
| Cost to mine a Bitcoin(2) | $ | 18,815 | $ | 16,305 | $ | 15,117 | $ | 13,175 | $ | 12,075 | |||||
| Energy cost per MWh | $ | 44.52 | $ | 73.19 | $ | 61.51 | $ | 70.77 | $ | 59.15 | |||||
| Hosting cost per MWh | $ | 63.33 | $ | 22.61 | $ | 60.47 | $ | 56.00 | $ | — | |||||
| Bitcoin mined - Digital Assets Mining(3) | 1,244 | 1,273 | 2,168 | 1,636 | 95 | ||||||||||
| Energy capacity under management | 839 MW | 730 MW | 730 MW | 92 MW | 50 MW | ||||||||||
| (1) | Cost to mine a Bitcoin (excluding hosted facilities) is equivalent to the all-in electricity cost to mine a Bitcoin at owned facilities and includes the Company’s net share of the King Mountain JV. | |
| (2) | Cost to mine a Bitcoin (or weighted average cost to mine a Bitcoin) is calculated as the sum of total all-in electricity expense and hosting expense divided by Bitcoin mined during the respective periods and includes the Company’s net share of the King Mountain JV. | |
| (3) | Bitcoin mined – Digital Assets Mining excludes the Company’s net share of the King Mountain JV. | |
Select Six Months Ended December 31, 2023 Financial Results
Revenue for the six months ended December 31, 2023 increased by
Cost of revenue (exclusive of depreciation and amortization) for the six months ended December 31, 2023 was
Depreciation for the six months ended December 31, 2023 was
General and administration expenses for the six months ended December 31, 2023 were
Net income for the six months ended December 31, 2023 improved to
Adjusted EBITDA for the six months ended December 31, 2023 increased by
As of December 31, 2023, the Company held 9,195 Bitcoin on its balance sheet, representing a market value of approximately
A reconciliation of Adjusted EBITDA to the most comparable GAAP measure, net income (loss), and an explanation of this measure has been provided in the table included below in this press release.
CONFERENCE CALL
The Hut 8 Corp. Q4 2023 webcast will commence at 8:30 a.m. ET, today.
To join the live webcast, please visit this link.
Analyst Coverage of Hut 8 Mining:
A full list of Hut 8 Corp. analyst coverage can be found here: https://hut8.com/investors/
About Hut 8
Hut 8 is an energy infrastructure operator and Bitcoin miner with self-mining, hosting, managed services, and traditional data center operations spanning ten sites across North America. Headquartered in Miami, Florida, Hut 8 operates five Bitcoin mining, hosting, and managed services sites in Alberta, New York, Nebraska, and Texas and five high performance computing data centers in British Columbia and Ontario. For more information, visit www.hut8.com and follow us on X (formerly known as Twitter) at @Hut8Corp.
Cautionary Note Regarding Forward–Looking Information
This press release includes “forward-looking information” and “forward-looking statements” within the meaning of Canadian securities laws and United States securities laws, respectively (collectively, “forward-looking information”). All information, other than statements of historical facts, included in this press release that address activities, events, or developments that Hut 8 expects or anticipates will or may occur in the future, including statements relating to growth strategy, including growing self-mining and diversifying their business, future profitability, topline revenue growth and cost reduction, reducing the need for external capital and limiting shareholder dilution, building a best-in-class operating business and a lasting, generational business, maximizing shareholder value, and future business strategy, competitive strengths, expansion, and growth of the business and operations more generally, and other such matters is forward-looking information. Forward-looking information is often identified by the words “may”, “would”, “could”, “should”, “will”, “intend”, “plan”, “anticipate”, “allow”, “believe”, “estimate”, “expect”, “predict”, “can”, “might”, “potential”, “predict”, “is designed to”, “likely,” or similar expressions.
Statements containing forward-looking information are not historical facts, but instead represent management’s expectations, estimates, and projections regarding future events based on certain material factors and assumptions at the time the statement was made. While considered reasonable by Hut 8 as of the date of this press release, such statements are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, level of activity, performance, or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to, security and cybersecurity threats and hacks, malicious actors or botnet obtaining control of processing power on the Bitcoin network, further development and acceptance of the Bitcoin network, changes to Bitcoin mining difficulty, loss or destruction of private keys, increases in fees for recording transactions in the Blockchain, erroneous transactions, reliance on a limited number of key employees, reliance on third party mining pool service providers, regulatory changes, classification and tax changes, momentum pricing risk, fraud and failure related to digital asset exchanges, difficulty in obtaining banking services and financing, difficulty in obtaining insurance, permits and licenses, internet and power disruptions, geopolitical events, uncertainty in the development of cryptographic and algorithmic protocols, uncertainty about the acceptance or widespread use of digital assets, failure to anticipate technology innovations, climate change, currency risk, lending risk and recovery of potential losses, litigation risk, business integration risk, changes in market demand, changes in network and infrastructure, system interruption, changes in leasing arrangements, failure to achieve intended benefits of power purchase agreements, potential for interrupted delivery, or suspension of the delivery, of energy to the Company’s mining sites, and other risks related to the digital asset and data center business. For a complete list of the factors that could affect the Company, please see the “Risk Factors” section of the Company’s Transition Report on Form 10-K for the transition period from July 1, 2023 to December 31, 2023, when available under the Company’s EDGAR profile at www.sec.gov, and Hut 8’s other continuous disclosure documents which are available under the Company’s SEDAR+ profile at www.sedarplus.ca and under the Company’s EDGAR profile at www.sec.gov.
Adjusted EBITDA
In addition to results determined in accordance with GAAP, Hut 8 relies on Adjusted EBITDA to evaluate its business, measure its performance, and make strategic decisions. Adjusted EBITDA is a non-GAAP financial measure. The Company defines Adjusted EBITDA as net income (loss) before interest, taxes, depreciation and amortization, further adjusted by depreciation and amortization embedded in the equity in earnings (losses) from an unconsolidated joint venture, the removal of non-recurring transactions, the impairment of long-lived assets, foreign exchange gains or losses and stock-based compensation expense in the period presented. You are encouraged to evaluate each of these adjustments and the reasons the Company’s Board and management team consider them appropriate for supplemental analysis.
The Company’s Board and management team use Adjusted EBITDA to assess its financial performance because it allows them to compare operating performance on a consistent basis across periods by removing the effects of capital structure (such as varying levels of interest expense and income), asset base (such as depreciation and amortization), and other items (such as non-recurring transactions mentioned above) that impact the comparability of financial results from period to period.
Net income (loss) is the GAAP measure most directly comparable to Adjusted EBITDA. In evaluating Adjusted EBITDA, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of the adjustments in such presentation. The Company’s presentation of Adjusted EBITDA should not be construed as an inference that its future results will be unaffected by unusual or non-recurring items. There can be no assurance that the Company will not modify the presentation of Adjusted EBITDA in the future, and any such modification may be material. Adjusted EBITDA has important limitations as an analytical tool and you should not consider Adjusted EBITDA in isolation or as a substitute for analysis of results as reported under GAAP. Because Adjusted EBITDA may be defined differently by other companies in the industry, the Company’s definition of this non-GAAP financial measure may not be comparable to similarly titled measures of other companies, thereby diminishing its utility.
| Hut 8 Corp. and Subsidiaries | |||||||||||||||||||||
| Consolidated Statements of Operations and Comprehensive Income (Loss) | |||||||||||||||||||||
| (in thousands, except share and per share data) | |||||||||||||||||||||
| Period from | |||||||||||||||||||||
| Six Months Ended | Twelve Months Ended | December 4, 2020 | |||||||||||||||||||
| December 31, | (Inception) through | ||||||||||||||||||||
| December 31, | 2022 | June 30, | June 30, | June 30, | |||||||||||||||||
| 2023 | (Unaudited) | 2023 | 2022 | 2021 | |||||||||||||||||
| Revenue: | |||||||||||||||||||||
| Digital Assets Mining | $ | 41,477 | $ | 25,744 | $ | 49,247 | $ | 68,164 | $ | 4,272 | |||||||||||
| Managed Services | 12,595 | 2,600 | 12,798 | — | — | ||||||||||||||||
| High Performance Computing – Colocation and Cloud | 1,138 | — | — | — | — | ||||||||||||||||
| Other | 5,395 | 17,641 | 20,115 | 5,566 | — | ||||||||||||||||
| Total revenue | 60,605 | 45,985 | 82,160 | 73,730 | 4,272 | ||||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization shown below): | |||||||||||||||||||||
| Cost of revenue - Digital Assets Mining | 26,508 | 23,193 | 38,601 | 23,361 | 1,464 | ||||||||||||||||
| Cost of revenue - Managed Services | 3,366 | 1,063 | 975 | — | — | ||||||||||||||||
| Cost of revenue - High Performance Computing – Colocation and Cloud | 655 | — | — | — | — | ||||||||||||||||
| Cost of revenue - Other | 3,773 | 3,512 | 3,536 | 2,422 | — | ||||||||||||||||
| Total cost of revenue | 34,302 | 27,768 | 43,112 | 25,783 | 1,464 | ||||||||||||||||
| Operating expenses: | |||||||||||||||||||||
| Depreciation and amortization | 10,620 | 11,811 | 18,779 | 11,591 | 391 | ||||||||||||||||
| General and administrative expenses | 37,551 | 10,609 | 27,344 | 31,325 | 12,144 | ||||||||||||||||
| Gains on digital asset | (32,626 | ) | — | — | — | — | |||||||||||||||
| Loss on sale of property and equipment | 443 | — | 445 | — | — | ||||||||||||||||
| Realized gain on sale of digital assets | — | (2,201 | ) | (4,577 | ) | (5,455 | ) | — | |||||||||||||
| Impairment of digital assets | — | 2,272 | 3,703 | 30,301 | 1,254 | ||||||||||||||||
| Impairment of long-lived assets | — | 63,574 | 63,574 | — | — | ||||||||||||||||
| Legal settlement | — | — | (1,531 | ) | — | — | |||||||||||||||
| Total operating expenses | 15,988 | 86,065 | 107,737 | 67,762 | 13,789 | ||||||||||||||||
| Operating income (loss) | 10,315 | (67,848 | ) | (68,689 | ) | (19,815 | ) | (10,981 | ) | ||||||||||||
| Other (expense) income: | |||||||||||||||||||||
| Foreign exchange gain | 1,002 | — | — | — | — | ||||||||||||||||
| Interest expense | (11,703 | ) | (14,703 | ) | (27,935 | ) | (6,919 | ) | (200 | ) | |||||||||||
| Gain on debt extinguishment | — | — | 23,683 | — | — | ||||||||||||||||
| Equity in earnings (losses) of unconsolidated joint venture | 6,173 | (510 | ) | 6,132 | — | — | |||||||||||||||
| Total other (expense) income | (4,528 | ) | (15,213 | ) | 1,880 | (6,919 | ) | (200 | ) | ||||||||||||
| Net income (loss) before taxes | 5,787 | (83,061 | ) | (66,809 | ) | (26,734 | ) | (11,181 | ) | ||||||||||||
| Income tax benefit (provision) | 421 | 1,808 | 1,198 | (5,069 | ) | 2,097 | |||||||||||||||
| Net income (loss) | $ | 6,208 | $ | (81,253 | ) | $ | (65,611 | ) | $ | (31,803 | ) | $ | (9,084 | ) | |||||||
| Net income (loss) per share of common stock: | |||||||||||||||||||||
| Basic | $ | 0.12 | $ | (2.02 | ) | $ | (1.58 | ) | $ | (0.94 | ) | $ | (0.42 | ) | |||||||
| Diluted | $ | 0.11 | $ | (2.02 | ) | $ | (1.58 | ) | $ | (0.94 | ) | $ | (0.42 | ) | |||||||
| Weighted average number of shares of common stock outstanding: | |||||||||||||||||||||
| Basic | 51,268,013 | 40,134,586 | 41,471,593 | 33,900,145 | 21,452,996 | ||||||||||||||||
| Diluted | 55,272,610 | 40,134,586 | 41,471,593 | 33,900,145 | 21,452,996 | ||||||||||||||||
| Net income (loss) | $ | 6,208 | $ | (81,253 | ) | $ | (65,611 | ) | $ | (31,803 | ) | $ | (9,084 | ) | |||||||
| Other comprehensive income: | |||||||||||||||||||||
| Foreign currency translation adjustments | 10,761 | — | — | — | — | ||||||||||||||||
| Total comprehensive income (loss) | $ | 16,969 | $ | (81,253 | ) | $ | (65,611 | ) | $ | (31,803 | ) | $ | (9,084 | ) | |||||||
Adjusted EBITDA reconciliation:
| Six Months Ended December 31, | Increase | |||||||||||
| (in thousands) | 2023 | 2022 | (Decrease) | |||||||||
| Net income (loss) | $ | 6,208 | $ | (81,253 | ) | $ | 87,461 | |||||
| Interest expense | 11,703 | 14,703 | (3,000 | ) | ||||||||
| Income tax benefit | (421 | ) | (1,808 | ) | 1,387 | |||||||
| Depreciation and amortization | 10,620 | 11,811 | (1,191 | ) | ||||||||
| Share of unconsolidated joint venture depreciation and amortization(1) | 10,503 | 2,540 | 7,963 | |||||||||
| Foreign exchange gain | (1,002 | ) | — | (1,002 | ) | |||||||
| Loss on sale of property and equipment | 443 | — | 443 | |||||||||
| Non-recurring transactions(2) | 12,044 | — | 12,044 | |||||||||
| Impairment of long-lived assets | — | 63,574 | (63,574 | ) | ||||||||
| Stock-based compensation expense | 12,216 | 3,263 | 8,953 | |||||||||
| Adjusted EBITDA | $ | 62,314 | $ | 12,830 | $ | 49,484 | ||||||
| (1) | Net of the accretion of fair value differences of depreciable and amortizable assets included in equity in earnings of unconsolidated joint venture in the Consolidated Statements of Operations and Comprehensive Income (Loss) in accordance with ASC 323. See Note 9. Investment in unconsolidated joint venture of the Consolidated Financial Statements for further detail. | |
| (2) | Non-recurring transactions for the six months ended December 31, 2023 represent approximately |
Contacts
Hut 8 Investor Relations
Sue Ennis
sue@hut8.io
Hut 8 Media Relations
Eoin Fay
eoin.fay@hut8.io
FAQ
What was Hut 8 Corp.'s revenue for the six months ended December 31, 2023?
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